Recent US-Israeli strikes on Iran and subsequent retaliatory attacks impacting Saudi Arabia, the UAE, Qatar, Kuwait, and Bahrain are highlighting the significant stakes South Korean tech giants have in the Gulf region.
While no direct damage to Korean operations has been reported to date, the region represents a crucial and growing market for companies like Samsung Electronics, LG Electronics, and leading Korean chipmakers. This includes substantial sales of premium consumer electronics and, increasingly, lucrative contracts related to the development of AI data centers in the Gulf.
According to third-quarter 2025 data from Omdia, Samsung commands 34% of the Middle Eastern smartphone market, exceeding its closest competitor by more than double. Regional sales of its Galaxy S25 Ultra experienced a 7% year-on-year increase, fueled by robust demand for high-end devices among Gulf consumers. Furthermore, Samsung and LG hold the top two positions in the region’s TV and home appliance markets, making it one of the few global areas where Korean brands maintain a clear lead over Chinese rivals competing on price.
Samsung launched its Galaxy S26 series on Wednesday, just three days before the strikes commenced. The preorder period for the new phones, a vital early indicator of sales performance, now coincides with the most unstable security situation the Gulf has witnessed in years.
The semiconductor exposure is channeled through a newer, but potentially more significant avenue. In October 2025, Samsung and SK hynix secured contracts to supply memory chips for the Stargate AI data center project in the UAE, a major AI infrastructure initiative outside of the United States. South Korea officially committed to the project last November following a summit between President Lee Jae Myung and UAE President Mohamed bin Zayed Al Nahyan. Separately, a consortium of seven Korean AI companies signed a cooperation agreement with Saudi Aramco’s digital subsidiary on Feb. 1, focused on providing AI chips, software models, and cloud infrastructure.
The potential impact on these business lines remains uncertain. An industry official within the semiconductor sector suggested that the immediate effects are anticipated to be minimal, but emphasized that the industry is closely monitoring the situation for a possible prolonged period of instability. An appliance industry representative noted that logistics routes could be diverted to avoid the Strait of Hormuz if necessary, but acknowledged that a sustained decrease in regional consumer confidence would present a more formidable challenge.
This conflict arises at a time when South Korea is experiencing record-breaking export figures for February. The Ministry of Trade, Industry and Resources announced on Sunday that shipments reached $67.45 billion (approximately 97.8 trillion won) last month, a 29% increase year-on-year, with semiconductor exports skyrocketing by 161% to $25.16 billion.
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